Poverty indicators were calculated on the basis of data on total net income of a household and all household members defined by the Household Budget Survey for the years 2003, 2004 and 2005. The Survey was carried out on the random sample of private households in such a way that the sample was separately defined for each year, that is, there was not a panel part of the sample (households were not repeatedly interviewed every year).
The at-risk-of-poverty rate is the percentage of persons living in households where the equivalised total net household income is below the at-risk-of-poverty threshold. In 2005 this rate was 17.5% and in 2004 it was 16.7%.
The at-risk-of-poverty threshold is determined in a relative way and it is based on the distribution of income, so in 2005 its annual level for a one-person household amounted to 21 237.57 kuna and for a household consisting of two adults and two children to 44 598.89 kuna. Persons living under the threshold are in a worse situation than others, but they do not necessarily live in deprivation.
1. POVERTY INDICATORS
|
|
Income |
|||||
|
|
2003. |
2004. |
2005. |
|||
|
With |
Without |
With |
Without |
With |
Without |
|
|
|
|
|
|
|
|
|
|
At-risk-of-poverty rate, % |
16,9 |
18,9 |
16,7 |
18,8 |
17,5 |
19,9 |
|
At-risk-of-poverty threshold for one-person |
18 895,88 |
17 376,04 |
20 713,83 |
19 142,55 |
21 237,57 |
19 644,41 |
|
|
|
|
|
|
|
|
|
At-risk-of-poverty
threshold for households consisting |
39 681,35 |
36 489,68 |
43 499,05 |
40 199,36 |
44 598,89 |
41 253,27 |
|
|
|
|
|
|
|
|
|
At-risk-of-poverty
rate |
|
|
|
|
|
|
|
Men |
15,8 |
17,7 |
15,1 |
17,0 |
15,9 |
18,1 |
|
Women |
17,9 |
20,1 |
18,1 |
20,5 |
18,9 |
21,5 |
|
0 – 15 years |
15,2 |
16,6 |
14,8 |
17,4 |
19,7 |
20,9 |
|
Men |
15,6 |
16,4 |
13,7 |
16,3 |
18,2 |
19,0 |
|
Women |
14,7 |
16,7 |
15,9 |
18,6 |
21,3 |
23,0 |
1. POVERTY INDICATORS
(continued)
|
|
Income |
|||||
|
|
2003. |
2004. |
2005. |
|||
|
With |
Without |
With |
Without |
With |
Without |
|
|
|
|
|
|
|
|
|
|
16 – 24 years |
15,4 |
17,2 |
13,1 |
13,2 |
15,3 |
16,1 |
|
Men |
16,2 |
17,0 |
13,5 |
13,9 |
15,9 |
16,8 |
|
Women |
14,6 |
17,3 |
12,7 |
12,4 |
14,7 |
15,3 |
|
25 – 49 years |
12,5 |
14,2 |
12,3 |
13,9 |
13,1 |
14,3 |
|
Men |
12,4 |
14,0 |
12,3 |
14,0 |
12,9 |
14,4 |
|
Women |
12,7 |
14,3 |
12,4 |
13,7 |
13,2 |
14,2 |
|
50 – 64 years |
15,5 |
16,7 |
15,0 |
16,7 |
15,6 |
18,5 |
|
Men |
15,4 |
16,7 |
14,8 |
15,8 |
15,0 |
18,0 |
|
Women |
15,5 |
16,6 |
15,1 |
17,6 |
16,1 |
18,9 |
|
65 years and over |
27,9 |
32,2 |
29,5 |
34,0 |
25,6 |
31,0 |
|
Men |
23,6 |
28,6 |
24,4 |
28,1 |
20,9 |
25,7 |
|
Women |
30,6 |
34,4 |
32,9 |
38,0 |
28,5 |
34,4 |
|
At-risk-of-poverty
rate, by most frequent activity |
|
|
|
|
|
|
|
Employed |
5,2 |
5,6 |
4,4 |
4,6 |
3,9 |
4,3 |
|
Men |
6,0 |
6,6 |
4,5 |
5,3 |
5,0 |
5,4 |
|
Women |
(4,3) |
(4,3) |
(4,3) |
(3,8) |
(2,7) |
(2,8) |
|
Self-employed |
18,4 |
25,5 |
22,6 |
28,2 |
13,7 |
17,0 |
|
Men |
16,8 |
22,8 |
21,7 |
28,1 |
(13,7) |
(15,2) |
|
Women |
20,1 |
28,5 |
23,8 |
28,4 |
(13,8) |
(19,6) |
|
Unemployed |
32,4 |
34,1 |
32,0 |
33,2 |
33,4 |
37,3 |
|
Men |
39,7 |
40,6 |
39,4 |
37,8 |
36,9 |
41,5 |
|
Women |
26,6 |
28,9 |
25,7 |
29,3 |
30,0 |
33,2 |
|
Retired |
20,7 |
22,4 |
20,5 |
23,5 |
19,3 |
22,5 |
|
Men |
20,3 |
23,3 |
20,5 |
22,2 |
19,1 |
21,6 |
|
Women |
21,0 |
21,7 |
20,5 |
24,5 |
19,5 |
23,2 |
|
Other economically inactive |
20,3 |
22,6 |
19,7 |
22,1 |
23,7 |
25,9 |
|
Men |
17,7 |
18,8 |
14,8 |
17,1 |
19,2 |
20,9 |
|
Women |
22,0 |
25,1 |
23,0 |
25,4 |
26,8 |
29,5 |
|
At-risk-of-poverty rate, by household type and age, % |
|
|
|
|
|
|
|
One-person household |
34,7 |
37,3 |
35,9 |
41,2 |
31,1 |
38,6 |
|
Men |
28,3 |
32,0 |
27,6 |
31,6 |
(22,1) |
27,5 |
|
Women |
37,3 |
39,4 |
40,5 |
46,5 |
34,2 |
42,5 |
|
One-person household, 30 – 64 years |
(24,7) |
26,5 |
28,1 |
32,5 |
25,7 |
28,3 |
|
One-person household, 65 years and over |
41,8 |
44,9 |
41,9 |
47,9 |
35,2 |
45,5 |
|
Two adults, no dependent children, both adults under 65 years |
11,8 |
13,3 |
14,4 |
16,9 |
12,3 |
15,3 |
|
Two adults, no dependent children, at least one adult 65 years or over |
26,1 |
30,4 |
28,7 |
33,1 |
25,6 |
30,1 |
|
Other households with no dependent children |
9,3 |
11,1 |
9,0 |
10,4 |
7,7 |
10,2 |
|
Single parent household, one or more dependent children |
(29,1) |
(31,8) |
21,0 |
23,6 |
34,8 |
41,0 |
|
Two adults, one dependent child |
14,9 |
14,7 |
9,8 |
11,0 |
12,8 |
13,3 |
|
Two adults, two dependent children |
13,7 |
15,2 |
10,5 |
11,8 |
13,1 |
14,1 |
|
Two adults, three or more dependent children |
19,1 |
21,6 |
24,2 |
26,3 |
31,0 |
31,6 |
|
Other households with dependent children |
13,0 |
15,2 |
13,1 |
14,3 |
13,4 |
14,4 |
1. POVERTY INDICATORS
(continued)
|
|
Income |
|||||
|
|
2003. |
2004. |
2005. |
|||
|
|
With |
Without |
With |
Without |
With |
Without |
|
|
|
|
|
|
|
|
|
At-risk-of-poverty rate by tenure status, % |
|
|
|
|
|
|
|
Tenant (contracted, fixed and full rent) |
20,2 |
20,2 |
(10,5) |
(11,8) |
21,6 |
20,7 |
|
Owner or rent free |
16,8 |
18,9 |
17,0 |
19,2 |
17,3 |
19,8 |
|
Inequality
of income distribution – quintile share ratio |
4,4 |
5,0 |
4,5 |
5,2 |
4,5 |
5,1 |
|
Gini coefficient |
0,29 |
0,30 |
0,29 |
0,31 |
0,29 |
0,31 |
|
Relative at-risk-of-poverty gap, % |
21,1 |
24,2 |
22,4 |
25,7 |
22,9 |
24,8 |
|
Dispersion around the at-risk-of-poverty threshold |
|
|
|
|
|
|
|
40% cut off |
5,2 |
6,8 |
5,2 |
7,2 |
5,4 |
7,5 |
|
50% cut off |
10,2 |
12,1 |
10,5 |
12,8 |
10,7 |
12,9 |
|
70% cut off |
24,6 |
25,7 |
24,3 |
26,1 |
25,5 |
27,4 |
|
At-risk-of-poverty threshold before social transfers, % |
|
|
|
|
|
|
|
Pensions included in income |
33,3 |
35,3 |
33,7 |
35,6 |
34,9 |
36,8 |
|
Pensions excluded from income |
42,3 |
43,8 |
41,4 |
43,3 |
43,2 |
44,3 |
Poverty indicators were calculated on the basis of two definitions of net income calculation, depending on whether the income includes both cash earnings and benefits in kind (see Table 1, column containing item “With income in kind”) or cash earnings only (see Table 1, column containing item “Without income in kind”), in order to present the influence of benefits in kind on income and, consequently, on the at-risk-of-poverty rate and the at-risk-of-poverty threshold.
The quintile share ratio (S80/S20), which registers changes in the upper and lower quintiles of equivalised income, amounted to 4.5 in 2005, which means that it remained unchanged as compared to the year 2004.
The Gini coefficient, as a measure of the inequality of income, takes into consideration the total distribution of income. In 2005 it did not change, so it was still 0.29 as in 2004.
The relative at-risk-of-poverty gap grew up from 22.4% in 2004 to 22.9% in 2005, which shows that the difference between the at-risk-of poverty threshold and the equalised median income of persons below the at-risk-of-poverty threshold increased.
Data on indicators of dispersion around the at-risk-of-poverty threshold lead to the conclusion that rather large number of persons is located over 60% cut off, which resulted in the fact that the at-risk-of poverty rate on 70% cut off was significantly higher. It can be well seen in the difference between 17.5% and 25.5% persons, which makes the difference of 8.0% persons in 2005. This difference was somewhat lower in 2004 and amounted to 7.6% persons.
The at-risk-of-poverty rate before social transfers, when pensions were included in income, was 34.9% in 2005, while in 2004 it was 33.7%. The at-risk-of-poverty rate before social transfers, when pensions were excluded from the income, was 43.2% in 2005, while in 2004 it was 41.4%.
NOTES ON METHODOLOGY
The data source
Poverty indicators for Croatia were calculated by using data collected through the Household Budget Survey for 2003, 2004 and 2005. The Survey was carried out on the random sample of private households in such a way that the sample was separately defined for each year, that is, there was not a panel part of the sample (households were not repeatedly interviewed every year). This kind of a sample design does not allow tracking of occurrence through time.
Definitions
The poverty indicators or Laeken indicators were adopted at the Laeken European Council in December 2001. The list contains 18 indicators covering the following areas: financial poverty, employment, health and education. This First Release presents monetary indicators of poverty.
The Eurostat methodology Laeken Indicators, Detailed Calculation Methodology, Luxembourg 2003, was used in calculations of poverty indicators for the Republic of Croatia.
Total income of household is the total net income received by household and all its members. It includes income from paid employment, income from self-employment, property income, pensions (old-age or survivors’), social transfers, other transfers received from persons who are not household members. Total income excludes transfers paid to other household and imputed rent.
The indicators were calculated on the basis of two income definitions. According to the first one, the income includes cash earnings and benefits in kind, such as value of goods consumed from own production and other benefits in kind (income from work carried out for benefits in kind, gifts received in kind, personal use of company car). According to the other definition, income includes only cash earnings.
Adult equivalent is a measure by which all members of a household are reduced to an adult. This procedure is applied in order to allot equal share to each member with respect to joint earnings. For that purpose there are various equivalence scales, differing in coefficients they use. In the calculation of poverty indicators the modified OECD scale was used, in which the household head is given coefficient 1, every other adult aged 14 and over is given coefficient 0.5, and every child under 14 years of age is given coefficient 0.3.
Equivalised income is calculated in the way that the total household income is divided by equivalised household size according to the modified OECD scale.
At-risk-of-poverty rate is the percentage of persons whose equivalised net income is below the at-risk-of-poverty threshold.
At-risk-of-poverty threshold is defined as 60% of median net income of all households. At-risk-of-poverty threshold is determined relatively, based on the distribution of income. Therefore it does not measure so much poverty itself but the inequality among population.
At-risk-of-poverty rate before social transfers shows the percentage of the population having an equivalent net income before social transfers below the at-risk-of-poverty threshold. Two definitions of the income have to be taken into account at this indicator, depending on whether pensions are considered social transfers or not.
This indicator should be used in connection with the at-risk-of-poverty rate after social transfers in order to evaluate the impact of social transfers.
Social transfers include unemployment benefits, child allowance, maternity leave benefits, layette assistance, compensations for sick leave of 42 or more days, allowance for physical injury and nursing by other person, social welfare payments, compensation for the rehabilitation or employment of disabled persons, disability pensions (domestics or from abroad), scholarships or educational allowances, funds received from other persons for housing expenses.
Quintile share ratio (S80/S20) is the ratio between an average equivalised household income of 20% persons with the highest income and 20% persons with the lowest income.
Gini coefficient is a measure of income inequality, which takes into account the full distribution of income. Its value ranges between 0 and 1. The higher it is the greater is the income inequality.
Relative at-risk-of-poverty gap is the difference between the at-risk-of-poverty threshold and equivalised income median of persons below the at-risk-of-poverty threshold, expressed as a percentage of the at-risk-of-poverty threshold.
Abbreviations
OECD Organization for Economic Co-operation and Development
Symbols
( ) insufficiently reliable estimate